China Vanke Posts 4.8% Increase in Net Profit for first Nine Months

This article was originally published on October 26, 2014, at 11:36 pm.

Summary:

Chinese real estate developer China Vanke (000002.SZ) said that its net profit for the first nine months of 2014 increased 4.84% year-over-year to RMB 6.5 billion.

The company posted a 0.43% decrease in revenue to RMB 63 billion.

EPS was RMB 0.586, increasing 4.78% compared with the same period last year.

Why It Matters:

As the housing market has cooled down in recent months, China Vanke has reduced its development of new real estate projects. During the first three quarters, the company completed 6.6 million square meters of projects, accounting for only 44.7% of the annual target. China Vanke says it will accelerate the development of projects in the fourth quarter and maintain its annual project construction target.

The Chinese government, including the People’s Bank of China (PBOC) and local governments, has released several policies to boost the housing market, especially after the GDP growth rate hit a record low of 7.3%. Therefore, the housing market is expected to recover in the fourth quarter.

China Vanke says it follows a “cash is king” strategy and maintains liquidity at a very high level. By the end of September, the company was holding RMB 48.7 billion in cash, up RMB 4.3 billion from the beginning of the year.